Family Travel Is the Sole Shareholder in Its Subsidiary, FT

question 45

Multiple Choice

Family Travel is the sole shareholder in its subsidiary, FT Insurance. Family Travel has decided to divest itself of its insurance operations and does so by distributing the shares in the subsidiary to the shareholders of Family Travel. This distribution of shares is called a(n) :

• A) lockup transaction.
• B) bear hug.
• C) equity carve-out.
• D) spin-off.
• E) split-up.

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Definitions:

Testator

A person who writes a will.

Forgery

The fraudulent making or altering of a writing in a way that changes the legal rights and liabilities of another and with the intent to deceive or defraud.

Legal Document

A formal document that is legally enforceable or that can serve as evidence in a legal proceeding.

Intestate

The state of dying without a will.